On 27 September 2024, the Accelerated Settlement Taskforce’s (AST) Technical Group published a draft recommendations report and consultation.

Background

The AST was established as part of the Edinburgh Reforms to examine the case for the securities settlement cycle to be shortened from its current standard of Trade Date plus 2 days, or ‘T+2’, to Trade Date plus 1 day or ‘T+1’. The AST’s initial report, published in March 2024, recommended that the UK should commit to moving to a T+1 standard settlement cycle at the latest by the end of 2027.

It was recognised that a number of technical and operational changes would be necessary for the UK to be ready to move to T+1 and so the report also recommended that a new group – the Technical Group – should be set up to determine the details of these necessary technical changes. The report recommended that:

  • This group should select a specific date before the end of 2027 for the UK to transition to T+1.
  • Regardless of the migration date to T+1, appropriate operational changes, such as market standards for allocations and confirmations and electronic processes for exchanging SSIs, should be mandated with effect from a date in 2025 to help prepare for T+1.
  • The UK should engage with other European jurisdictions to see if it is practical to align similar moves to T+1 as well as taking account of the impact of the move to T+1 by North American markets (USA, Canada and Mexico) in May of 2024.

The Government accepted all of the recommendations in the AST’s report and established the AST Technical Group to carry out the next phase of work. The Technical Group was asked to produce a report with its findings and recommendations by the end of 2024, which it said may include actions for Government, the UK financial services regulators and industry participants.

The draft recommendations report and consultation

The draft recommendations include:

  • ‘Recommendation Zero’, which is the scope of instruments that will be covered by the implementation of T+1 in two scenarios (where the UK migrates to T+1 ahead of the EU and Switzerland; and where the UK, EU and Switzerland migrate together).
  • 43 ‘Principal recommendations’, which cover the critical post-trade activities that market participants must be able to complete efficiently if the UK’s transition to T+1 and their contribution to that is to be successful.
  • 14 ‘Additional recommendations’, which look at environmental issues that need to be addressed if the UK is to maximise the efficiency gains that T+1 can deliver, but which are not essential to the successful implementation of T+1.#

Next steps

The AST Technical Group is inviting comments on the draft recommendations until 31 October 2024.